TMI Blog2022 (12) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments of the assessee is not acceptable. Disallowance/addition to be made u/s 143(1)(a) - As decided in AA520 VEERAPPAMPALAYAM PRIMARY AGRICULTURAL COOPERATIVE CREDIT SOCIETY LIMITED - [ 2021 (4) TMI 1169 - MADRAS HIGH COURT ] scope of an 'intimation' under section 143(1)(a) of the Act, extends to the making of adjustments based upon errors apparent from the return of income and patent from the record, Thus to say that the scope of 'incorrect claim' should be circumscribed and restricted by the Explanation which employs the term 'entry' would, in my view, not be correct and the provision must be given full and unfettered play. The explanation cannot curtail or restrict the main thrust or scope of the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I therefore, rectify this mistake which is apparent from the record and the order passed by the bench is recalled. 4. In the result the miscellaneous petition filed by the revenue is allowed. The case was heard on merits. ITA No. 338/Bang/2022: 5. The ld. DR submitted that the latest decision of the Hon ble Supreme Court in the case of Checkmate Services (P.) Ltd. Vs CIT-1, [2022] 143 taxmann.com 178 (SC), where the Apex Court has held that Section 43B(b) does not cover employees' contributions to PF/ESI etc. deducted by employer from the salaries of employees and that employees contribution has to be deposited within the due date u/s 36(1)(va) of the Act i.e. due dates under the relevant employees welfare legislation li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es (supra) has considered the issue of whether the employees contribution paid before due date for filing the return of income u/s.139(1) of the Act otherwise allowable u/s.43B of the Act and putting to rest the contradicting decisions of various High Courts. The relevant extract of the decision is as under:- 52. When Parliament introduced Section 43B, what was on the statute book, was only employer s contribution (Section 34(1)(iv)). At that point in time, there was no question of employee s contribution being considered as part of the employer s earning. On the application of the original principles of law it could have been treated only as receipts not amounting to income. When Parliament introduced the amendments in 1988-89, inser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution required to be deposited by the employer (Section 36(1)(va)) was maintained - and continues to be maintained. On the other hand, Section 43B covers all deductions that are permissible as expenditures, or out-goings forming part of the assessees liability. These include liabilities such as tax liability, cess duties etc. or interest liability having regard to the terms of the contract. Thus, timely payment of these alone entitle an assessee to the benefit of deduction from the total income. The essential objective of Section 43B is to ensure that if assessees are following the mercantile method of accounting, nevertheless, the deduction of such liabilities, based only on book entries, would not be given. To pass muster, actual payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees contributions- which are deducted from their income. They are not part of the assessee employer s income, nor are they heads of deduction per se in the form of statutory pay out. They are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees, contribution within the due date as per the respective Act. Therefore, the disallowance can be made as per section 36(1)(va) r.w.s. 2(24)(x) of the Act. Hence, respectfully following the judgment of Hon ble Supreme court cited (supra), the arguments of the assessee is not acceptable. 8.1 The Ld. A.R. has also raised on the issue that the disallowance/addition cannot be made u/s 143(1)(a) of the Act. A similar issue has been decided by the coordinate bench of the Tribunal in ITA No.188/Coch/2021 for the AY 2016- 17 vide order dated 28.07.2022 and also following the judgment of the Hon ble Madras High Court, in which it has been held that the addition can be made u/s 143(1)(a) of the Act, the relevant para is as under: In this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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